Mu Linsen (002745) quick review of major events: Fengqi Indus fly
Matters: 1. Announcement announced by the company’s announcement; 2. Responding to the “Announcement on the Feedback of the First Review of the Administrative Licensing Project of the China Securities Regulatory Commission” regarding convertible bonds issued by the company (second time) Guoxin Electronic Viewpoint: The company proposes to publish local industriesFund investment holding subsidiaries and convertible bond projects can help the company further optimize the debt structure and reduce debt ratios and financial costs, which has a positive effect on the company’s fundamental improvement.
At the same time, an industrial fund with a state-owned background was launched to invest in Mulin Sen’s subsidiaries, showing trust and confidence in Mulin Sen.
Investment suggestion: After integrating LEDVANCE, Mulinsen, as the IDM integration leader of China’s LED industry chain, is expected to have a net profit of 816/1021 million yuan in 2019-2020, corresponding to approximately 18 times the PE, and maintain an “overweight” rating.
Comments: I. The company ‘s announcement is mainly due to the company ‘s proposed wholly-owned subsidiary, Ji’an Mulinsen, a local industrial fund investment holding company, to optimize the company ‘s resistance structure and reduce the company ‘s debt costs. The detailed breakdown is as follows: 1. According to the announcement, the investment is divided into the following:Three steps: (1) Jinlingling Company and Mulinsen Co., Ltd. invested a total of US $ 1 billion in Jinmu Electronics, of which Jinlingling Co. invested 60% to obtain 60% equity of Jinmu Electronics, and Mulinsen Co., Ltd. invested 4% to obtain 40% equity of Jinmu Electronics.
Among them, Jinmu Electronics is a wholly-owned subsidiary of Jinlingling. 100% equity of Jinlingling is held by the Jinggangshan Economic and Technological Development Zone Management Committee. The Jinggangshan Economic and Technological Development Zone Management Committee is the Ji’an Municipal Committee of the Communist Party of China, and the Ji’an Municipal People’s Government.Office-level units.
On behalf of the municipal party committee, the municipal government exercises unified leadership and unified management of party affairs, administration, economic, and social affairs in its area.
(2) Mulinsen shares 2.
63 billion U.S. dollars pledged the registered capital of Ji’an Mulinsen which was not in place.
54 trillion, 1 remaining.
The 099,000 yuan advanced capital reserve, after the first subscription is completed, the target company’s paid-in capital is 16.
Among them, Jilin Mulinsen was registered by the company on September 1, 2014, and is mainly engaged in the production of the company’s LED display packages and various types of lighting fixtures, with the goal of becoming a benchmark for intelligent factories.
(3) Jinmu Electronics obtained US $ 1.5 billion in M & A loans by applying for M & A loans from domestic commercial banks.
With the transfer of M & A loans and M & A self-financing funds (1 billion in the first item) in place, according to the transaction price of the target company (Ji’an Mulinsen) determined by the parties, Mulinsen shares transferred their holdings to Jinmu Electronics at zero consideration.51% of the target company ‘s unpaid capital, and the total consideration that Jinmu Electronics needs to pay to the target company for the 51% stake in the target company is RMB 2.5 billion (among which RMB 1 billion is self-financing funds and RMB 1.5 billion is M & A loans)).
Of the 2.5 billion investment made by Jinmu Electronics, 16.
83 million credited to the registered capital of the target company, 8.
17 trillion is included in capital reserve.
2. The profit forecast of the target projects in this agreement and the target parties agree that the target company will hire a third-party auditing agency approved by the acquirer before the end of April 2020, before the end of April 2021, before the end of April 2022, and 2023Prepare and issue the annual Audit Report in accordance with Chinese accounting standards before the end of April.
3. Agreement on exit conditions: 杭州夜生活网 The acquirer has the right (but has no obligation) to request the designated subsidiary of Mulinsen to repurchase the acquirer when any of the following conditions occur (whichever is earlier) (Ji’an Jinmu Electronics)All or part of the target company’s equity held at the time: (1) The audit report issued by the auditing agency approved by the acquirer shows that the target company did not meet the goals agreed in this agreement in the annual year of 2019 to 2022; (2) the target company occurredSignificant adverse changes, after reasonable calculation, have been unable to achieve the goals agreed in this agreement; (3) Audit institutions are unable to issue an audit report at the time specified in this agreement, or issue a qualified audit report on the target company.
And when the acquirer requires Mu Linsen Shares 杭州夜网论坛 to repurchase all or part of the target company’s equity held at that time, it shall send a written notice to Mu Linsen Shares (hereinafter referred to as the “redemption notice”); Mu Linsen Shares shall be redeemed upon receipt of the redemption.Within ninety (90) days after the notice, in accordance with the previously agreed redemption price, raise funds and repurchase all or part of the equity held by the acquirer at that time.
The target company correctly assumes joint and several liabilities for the repurchase obligation of Mulinsen shares.
The repurchase price is 100% of the total capital contribution (total of US $ 2.5 billion) corresponding to the equity held by the acquirer in the target company plus 6 years at that time.
4% simple interest, after deducting the dividends and bonuses accumulated during the investment period.
4. We believe that the company retains Ji’an Mulinsen, which is controlled by the local industry fund, and rediscovers that the company has made active efforts to reduce interest rates and pressure on the company’s compensation costs, and has gradually replaced the local capital’s trust and optimism in Mulinson, so it is willing to implementThe merger agreement further increased capital investment, which helped Ji’an Mulinsen reduce debt pressure and further expand and strengthen.
Second, the company’s announcement responded to the “Notice of a Feedback Opinion on the Review of the Administrative Licensing Project of the China Securities Regulatory Commission”. We selected some of the most important response points for investors, mainly including the improvement of the operation of the headquarters, the profit trend of Mulinson, and the currency in hand.Explanation of funds and overall rejection.
1. Regarding Mulinsen’s headquarters, the operating income is 35.
(1) The revenue of the company’s headquarters in Q2 2019 resumed a year-on-year increase from January to June 2019.
730,000 yuan, a decrease of 12 from the same period in 2018.
05%, of which in the first quarter of 2019 the operating income of Mulin Sen headquarters14.
0.94 million yuan, down 26 every year.
13%; second quarter operating income 20.
79 ppm, an increase of 1 per year.
The increase in the year-on-year decrease in the operating income of Mulin Sen’s headquarters in the first quarter of 2019 was mainly due to the decline in the average unit price of LED packaging products, which decreased by 24.
48%, the specific reasons include: 1. The decline in the price of raw materials such as chips and the improvement of production processes have reduced the unit cost of SMD LEDs by 29.
60%; 2, the company lost part of the display packaging market share due to a quality accident in 2018, and the company lowered the product price in order to regain and consolidate market share.
In addition, Mullinson’s headquarters optimized product structure in the first quarter of 2019 to reduce fierce competition in some markets and the replacement of low-gross products, which also affected the operating income to a certain extent.
With the gradual elimination of the impact of quality accidents in 2018 and the adjustment of product structure, the sales of Mulinsen’s headquarters in the second quarter of 2019 have steadily picked up, and operating income has achieved leapfrog and quarter-on-quarter growth.
The operating income of Mulin Sen headquarters in the second quarter of 2019 increased by 5 compared with the first quarter of 2019.
850,000 yuan, an increase of 38.78 million yuan from the second quarter of 2018.
In addition, the root cause of the increase in the second quarter is also a factor. The output and operating income caused by the suspension of the Spring Festival holiday and post-holiday employment in the first quarter were relatively reduced. After three months, the number of workers and production capacity gradually recovered.Sales are gradually rising.
(2) The gross profit margin has improved to some extent from 2019Q2, although the operating income of Mulinsen Headquarters in the first half of 2019 decreased by 12.
05%, but the direct impact of quality accidents has been eliminated in advance, the average unit price of main products SMD LED products in the first half of 2019 began to pick up compared with the second half of 2018.
At the same time, the company’s product cost control is better, and the product structure is optimized and adjusted, so the company’s gross profit margin has gradually recovered.
In the first half of 2019, the gross profit margin of the main business of Mulinsen Headquarters22.
57%, an increase of 4 per year.
For the 18 years, the gross profit margin of the main business of Mulinsen Headquarters in the second quarter of 2019 was 24.
98%, an increase of 5.
54 averages, gross profit margin is in the process of continuous recovery and recovery.
(3) The net profit after deduction from non-return motherhood is from January to June 2019, and the net profit from deduction from non-return motherhood of Mulin Sen headquarters is 1,882.
440,000 yuan, down 721 from the same period in 2018.
290,000 yuan, of which in the second quarter of 2019, the net profit of Mulinsen’s headquarters after deduction is 6,758.
0.64 million yuan, an increase of 11,634 compared with the first quarter of 2019.
It can be seen that the profitability of Mulin Sen’s headquarters is gradually rising, and the gross profit margin has gradually returned to the normal level in previous years, which is due to the gradual elimination of the impact of quality accidents in 2018, optimization of product structure, strengthening of cost control and expense management.
2. Questions on the currency funds and debts of Mulinsen (1) Explanation of currency funds in hand Mulinson currency funds inflow on June 30, 2019, the company’s currency funds were 52.
US $ 5.6 billion, of which restricted currency funds23.
89 ppm, the balance of the previous fund raising account was 4899.
680,000 yuan, after deducting the above funds, the company’s total disposable capital is 28.
180,000 yuan to support the daily operations of the company.
The company’s restricted currency funds mainly include bank acceptance deposits19.
32 trillion, draft deposit security deposit3.
US $ 8.6 billion, (2) Repayment and Debt Debts As of June 30, 2019, the company has an interest-bearing debt amount of 94.
1.5 billion, of which 78 are interest-bearing debt due within one year.
20,000 yuan, the company plans to raise funds7.
The company’s interest-bearing debt of 8 billion US dollars was repaid. After using the raised funds to repay debt and debt, the company’s asset-liability ratio on June 30, 2019 was 69.
36% to 66.
93%, the overall financial leverage has been reduced.
According to the calculation of 7% cost of funds, it is estimated that the repayment of debts and debt companies can save 54.6 million yuan in financial costs each year, which is conducive to improving the company’s profitability and anti-risk ability, and reducing the pressure on refund payment.
3. Explanation of the profit situation of Landvance (1) The actual net profit of Landvance in the second half of 2017 and 2018 reached the estimated net profit of the restructuring evaluation.
In the first half of 2019, Lande Vance achieved a net profit of 22,000 euros and a net profit of 7,234 thousand euros after deduction, which basically met the performance target.
Third, investment advice: LED IDM integration leader, maintain “overweight” rating Due to the domestic environmental factors and the impact of the trade war, the overall LED market demand is relatively weak, so the overall price pressure is greater.
In this context, the integration of LEDVANCE is gradually improving, and the operation of the headquarters has continued to improve, and the results obtained are not easy.
We believe that Mu Linsen, as the leader of China’s LED industry chain IDM integration, has a prominent industry segmentation. In the future, the improvement of the LED industry demand will be prioritized.
We estimate that the company’s net profit for 2019-2020 will be 816/1021 million yuan, corresponding to about 16 times the PE, and maintain the “overweight” level.